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Large businesses told to report average male and female salaries

August 2015

Proposals to compel larger companies to publish average salaries for their male and female employees in an effort to close the gender pay gap are to be debated by business leaders with Nicky Morgan, the UK government equality minister.

The talks, initiated by the government, are intended to decide the information to be given, including the breakdown by bands or roles so that accurate comparisons are possible.

The force of law will replace a voluntary arrangement agreed by the previous coalition government, to which only five employers responded with information.

Prime minister David Cameron announced that the new measure will cover businesses with more than 250 employees within ten years – certainly by the time his daughters, now aged eleven and four, are in jobs.

Cameron wrote in a newspaper article: “When my daughters Nancy and Florence start work, I want them to look back at the gender pay gap in the same way we look back at women not voting and not working, as something outdated and wrong, that we overcame, together.”

The gap was detailed by the Office for National Statistics, showing that, although it was at its narrowest since comparative figures began in 1997, it was nevertheless 9.4% in April.

Cameron’s statement has brought guarded optimism.

The opposition’s shadow minister, Gloria De Piero, welcomed the decision but insisted annual checks were needed “to make a real difference”.

Dr Shainaz Firfiray, a work-life specialist at Warwick Business School, thought disclosure would not close the gap unless women’s particular circumstances were considered.

She said: “The existing performance-oriented cultures within most contemporary workplaces further undermine the ability of females with more domestic responsibilities to compete on a level playing field while attaining a healthy work-life balance.

“Thus, it is imperative that firms place more emphasis on improving the status of females in the workplace through the promotion of more flexible forms of working.”

Lee Biggins, managing director of CV-Library, the UK’s largest job board, said: “It is encouraging to know that something concrete is being done about the gender pay gap as it is long overdue in this rapidly progressing world.”

Professor Cary Cooper, a business psychologist at Manchester Business School, regards Cameron’s announcement as a wake-up call to employers.

“It’s good as a signal,” he said. “Shareholders will ask why the hell there is a gender pay gap. Some employers will say they can’t afford parity, of course, but rates may therefore go up in stages.”

Advice is mixed with a welcome from Katja Hall, deputy director-general of the Confederation of British Industry, the employers’ body: “Addressing the gender pay gap is the right priority and we should set a target for reducing it.

“While we believe publishing pay gap data could be misleading, we will work with the government to ensure that rules on what is published are flexible enough to be relevant to each company.”